By Tom Paquin

We prattle on and on about the power of service optimization here, the invisible “service bucks” saved from mitigating truck rolls and streamlining technician performance. And these are all valuable things, certainly, but more and more businesses, to justify upgrades of their service systems and the development of new tools, are seeking to understand the total cost of service operations for their business. 

Putting numbers behind these functions is not new, but it has required a number of assumptions. And getting those costs together remains an integral component in allocation budgets, managing headcount, and crucially, setting service prices. So what are some tips on doing this with as few assumptions as possible, to provide as accurate a picture as possible of the total cost of service? Here are some thoughts:

You Can’t Measure Cost Until You Learn to Measure Service
Here’s the deal: Service software can, under many circumstances, turn data into an asset, and leveraging that data intelligently can go a long way to understanding how service processes fit together. Nevertheless, there’s two major caveats to this: Technical blind spots and human error (both of which are actually human error of course).

You can avoid technical blind spots by building a set of service tools that is as all-encompassing as possible. This means putting optimization, customer experience, enterprise planning, and human capital systems all under a single roof. Is this perfect? Of course not. One major consideration is where your software is coming from. If it’s all from a single vendor, then great, assuming that the ‘boil-the-ocean’ approach hasn’t limited functionality in any meaningful way. If it’s from a core vendor and a series of APIs, what’s the data “exchange rate”? Are your systems on comparable version numbers? Are they adequately calibrated to all new processes? These are all important considerations to ensure that service is being run correctly.

On the “human error” side, you need to ensure that you’re avoiding (as best as you can) bias in your technical criteria. It’s very easy to lean into things that make your business or your technicians look better. While that might be great for marketing, it limits the ability to price accurately, and it also impede the ability to benchmark service improvements accurately. 

Wait, Should We Actually Care About Any of This?
I’ll end by saying that while saving a service buck is nice in the immediate, the true value of service optimization comes from what you can pass onto your customer. Those savings, sometimes intangible, help retain customers, encourage upsells, and spurn new business. And at the end of the day, every dollar saved is worth half as much as a dollar of new revenue. 

So don’t forget who it is that you are optimizing your services processes for.